Generate Biomedicines raises $370M Series B with a focus on protein-based drugs

The drug development space is continuing to attract more and more investment. On Thursday, another major player, Generate Biomedicines, announced a $370 million Series B round. 

Generate Biomedicines is touting a platform-based approach to drug development, but with its own spin: a focus on proteins. 

Generate’s thesis is simple: Rather than making connections between targets and proteins that already exist in nature (or, most often, in scientific data and literature), it aims to understand the big picture — “foundational principles” about how proteins are made and why they do what they do (which is, basically everything, in the body). The ultimate goal is to use this knowledge to make novel proteins that could one day perform “the majority of life’s functions,” as Mike Nally, the CEO of Generate Biomedicines, told TechCrunch. 

Over the last three years, the company has managed to put such fundamental principles to use. 

“We’ve been able to generate novel proteins across all protein modalities, and so that includes antibodies, peptides, enzymes and cell and gene therapy,” Nally said. 

Generate Biomedicines is another one of a growing cadre of companies fostered by Flagship Pioneering — the investor behind Moderna. The company emerged from stealth back in 2020 with an initial investment of $50 million from the firm, in line with what we’ve seen in other Flagship companies, like the newly launched Alltrna.

This most recent round is Generate Biomedicines’ first significant attempt at external financing. The round will include Alaska Permanent Fund, Altitude Life Science Ventures, ARCH Venture Partners and funds and accounts advised by T. Rowe Price Associates, Inc., as well as additional investment from Flagship Pioneering. 

So far, Generate Biomedicines seems to have had little trouble generating interest. 

On one hand, the company could be benefitting from general trends. Venture capital investment in drug discovery nearly doubled between 2019 and 2020, reaching $16.2 billion. Meanwhile, investment in AI-based drug development has also snowballed. Per a Stanford University 2020 report, it reached $13.9 billion in 2020, over four times the level of funding in 2019. In August 2021, funding had reached $10.7 billion, per a Signify Research report

This round is large, but isn’t too far off of numbers seen this year for companies occupying a similar space: like Insilico Medicine’s $255 million Series C, or Cellarity’s (another Flagship Pioneering Company) $123 million Series B. 

Generate Biomedicines’ leadership chalks up the size of this round to the company’s new take on protein biology, and protein-based drug development as a whole. 

Therapeutic proteins, particularly monoclonal antibodies, are making up a bigger and bigger share of the drug market. In 2018, seven of the top 10 best-selling drugs were monoclonal antibodies. A 2020 report by Bioprocess International Magazine found that global sales of monoclonal antibodies have grown faster than all other biopharmaceuticals in the last five years. 

Monoclonal antibodies are perhaps most well-known in the realms of oncology and immunology. But use cases are expanding. For example, monoclonal antibodies, like those manufactured by Eli Lilly to treat COVID-19, is an example of a therapeutic protein that you’ve likely already heard of. 

Generate Biomedicines is focused on all protein modalities, but they have initially focused on developing antibodies, which Nally says make up about 60% of the protein-based biotherapeutics market. 

Still, generating antibodies is just part of the picture. The focus on foundational principles of protein function allows for an untapped level of bespoke protein design, adds Molly Gibson, co-founder and chief strategy innovation officer. 

To wrap your head around the scale, think of all the proteins that have been honed by natural selection since the beginning of life. Those proteins only represent a tiny fraction of the total possible proteins that our building blocks of life are capable of forming.

“The amount of sequence space that nature has sampled through the history of life would equate to almost just a drop of water in all of Earth’s oceans,” said Gibson. 

Generate Biomedicines’ approach is to use artificial intelligence to understand what other functional proteins we might be capable of making, as opposed to identifying untapped extant proteins. 

That said, therapeutic proteins aren’t the easiest drugs to make. Historically, the immune system hasn’t exactly been receptive to novel proteins. Gibson says the company’s technology can work around this roadblock. She says the company can “co-optimize” for immunogenicity and protein function. 

In order to do this, we have developed a proprietary experimental approach to measure and ML approach to learn how proteins are recognized by the immune system, so we can ultimately avoid it,” she said. 

Overall, Generate Biomedicines sees itself as both a drug maker and a platform. The company has several drug candidates in preclinical stages (the focus is infectious disease, oncology and immunology, says Nally). The goal is to pursue Investigational New Drug status by 2023.

But Generate Biomedicines’ major upside, per Nally, is that it’s a platform for others to smooth out the process of protein-based drug development in general. In the past Nally has indicated that partnerships would be part of Generate Biomedicines’ strategy. But so far, the company hasn’t disclosed any. Though he added the company is looking for partners with deep disease area expertise, or expertise on certain targets. 

With this current round of funding, Generate Biomedicines plans to scale up its workforce to 500 — the company has 80 employees at the moment. The company is also building two facilities to expand its wet lab, machine learning and data generation capabilities.